SAME SAME – BUT DIFFERENT !!

SAME SAME – BUT DIFFERENT !!

Real estate will always be “the” topic of conversation, as rich or poor, we all need a home and for those who own property it is usually their major capital investment. Whilst the landscape is continually changing, some things just never change! This explains why our “chameleon-like” industry can be misleading. If you cast you mind back to June 2004, our soon departing “Governor of Moolah” described the methodology of recording real estate data as “hopeless”. In his parliamentary testimony he said “There are two things wrong with information about the national property market: it’s not current and we watch median prices.” Ladies and gentlemen – two years on, nothing has changed and we are still led to believe that current data gives us an exact position of the market. Any market that has a top–end cannot, in my opinion, deliver a realistic and accurate market assessment because long settlements on properties continue to fly beneath the radar. The one thing you can be assured of, is that when quarterly results are published, there is no comparative analysis six and twelve months later when the true statistics are available. Much like “never let the facts get in the way of a good story”.

So this week it was over to the Housing Industry Authority that delivered its quarterly review of housing affordability. “Figures released today from the HIA/Commonwealth Bank Affordability Report show that affordability deteriorated again in the June 2006 quarter, dropping 5.3 per cent to be 6.1 per cent lower than Christmas last year. With the latest increase in interest rates, affordability would have taken a further hit.” It should be noted that these figures are not compiled from property sales data. Whilst it is true that interest rate increases do have an impact on housing affordability, there is another compelling argument that is missing. First home buyer numbers are falling and one of the reasons for this is increasing rents, because investors are no longer interested in investing funds in NSW. They are simply afraid that the NSW government will impose new taxes on property (to their detriment) as has been the case for years. This week, we observed in our Apartment Division, that twenty per cent of properties listed, were by investors saying goodbye to the investment market – indeed a sorry scenario! One could hardly blame them given that the budget is lying in deficit. Even more alarming is the recent discovery that the NSW government has squandered $1 billion in hand–outs to community groups and recovery of these grants is impossible, as there were no legally binding agreements. Makes one wonder why we keep pointing to interest rates when the major concern should be why investors refuse to invest in NSW. The fact that out of sixteen apartments currently listed by us, four are owned by investors, presents a pretty strong argument.

The Mosman market these days trades on a five per cent house ratio based on total numbers of homes in the municipality. Down from the ten per cent that has been the norm, this means that days on the market have reduced substantially. The process of finding homes is much quicker as property levels have dramatically reduced. The Cumberland Newspaper Group have made it easier for purchasers with the recent launch of The Mosman Daily online www.mosmandaily.com.au. Now you can read the weekly editions online which is a great initiative.

The big news item of the week was the radical and very smart upgrade by Fairfax, of their property portal www.domain.com.au. Now, when you go back into this property portal you don’t have the laborious task of entering search criteria. All you have to do, is enter Mosman in the suburb search, then click on last search and every time you log back in it takes you straight to the page you previously searched. From an IT perspective this is one of the most innovative moves we have seen and it is definitely much more user friendly. Also, all those additional advertisers that drive you mad have been relocated and it is much cleaner and easier on the eye. I have long argued that when someone goes to a property portal, they don’t necessarily want to be bombarded with offers of finance. This is just the first of a host of new releases that Fairfax will be rolling out over coming months (they have been very busy over Winter).

The real estate industry is changing and it is nice to see companies moving with the times. In the past (except for the fact that we keep paying them) many failed to understand what the industry was all about. How times change and now the key criteria is that you stay with them. Vendors are fast finding out that today, with all the resources available, there are alternate ways of selling property which is why the cost of advertising is on the way down. Forget about a few steak knives – give them the entire kitchen !! Cheers ^__^

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